Stock Market News for November 17, 2014 – Zacks Investment …
Benchmarks finished almost flat on Friday as Eurozone’s soft GDP data offset encouraging economic reports. Decline in healthcare stocks also eroded some of Friday’s gains. However, higher crude oil prices boosted energy shares. The meager gains helped the S&P 500 extend its record high. Moreover, benchmarks managed to register weekly gains for a fourth straight week.
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The Dow Jones Industrial Average (DJI) declined 0.1% to close at 17,634.74. The Standard & Poor 500 (S&P 500) gained a meager 0.02% to close at 2,039.82. The tech-laden Nasdaq Composite Index closed at 4,688.54; rising about 0.2%. The fear-gauge CBOE Volatility Index (VIX) declined 3.5% to settle at 13.31. A total of 6 billion shares were traded on Friday, lower than monthly average of 6.5 billion. Advancers outpaced declining stocks on the NYSE. For 51% stocks that advanced, 46% declined.
On Friday, the European Union’s statistics service Eurostat reported that the Eurozone’s GDP grew at a sluggish rate of 0.2% in the third quarter. The GDP data indicated that the economic bloc is still struggling to recover from economic stagnancy. The GDP of the two powerhouses, Germany and France, grew at 0.1% and 0.3% respectively. Moreover, GDP growth in the third largest economy, Italy, was negative. Italy witnessed a contraction of 0.1% in the quarter.
However, Greece and Spain, two of the countries hardest hit by the Euro zone’s financial crisis in the last few years, displayed a lot more economic vigor, with GDP growth of 0.7% and 0.5%.
Separately, the U.S. Census Bureau reported that retail sales rose 0.3% in October, compared to 0.3% decline in September. The tally also came in ahead of the consensus estimate of 0.2% gain. Decline in oil prices seems to be the main reason behind this increase. Moreover, a preliminary report showed that the University of Michigan/Thomson Reuters consumer-sentiment index rose to 89.4 in November from 86.9 in October, beating the consensus estimate of 87.6. This was also the highest reading of the index since Jul 2007.
On Friday, the price of WTI crude oil rose 2.1% to $75.82 per barrel. This had a positive impact on the Energy Select Sector SPDR (XLE), which gained more than 1%. The sector was the biggest gainer among the S&P 500 sectors. Key energy stocks including Marathon Oil Corporation (MRO – Analyst Report), Cabot Oil & Gas Corporation (COG – Analyst Report), EOG Resources, Inc. (EOG – Analyst Report) and Schlumberger Limited (SLB – Analyst Report) gained 1.3%, 2.8%, 2.4% and 0.5%, respectively. Six out of 10 S&P sectors registered gains on Friday.
Moreover, shares of both Halliburton Company (HAL – Analyst Report) and Baker Hughes Incorporated (BHI – Analyst Report) gained after Baker Hughes confirmed news that the oilfield service behemoth Halliburton was in talks to buy smaller rival Baker Hughes. Should the deal go through and the oilfield service providers tie up, it will create an industry powerhouse with a market value approaching $70 billion and 140,000 employees. Shares of Halliburton and Baker Hughes climbed 2.4% and 1.9%, respectively on Friday.
However, the Health Care Select Sector SPDR (XLV) was the biggest loser among the S&P 500 sectors on Friday. The sector declined 0.8%. Key healthcare stocks including Biogen Idec Inc. (BIIB – Analyst Report), Gilead Sciences Inc. (GILD – Analyst Report), Alexion Pharmaceuticals, Inc. (ALXN – Analyst Report) and Vertex Pharmaceuticals Incorporated (VRTX – Analyst Report) declined 4%, 2.1%, 2.5% and 1.2%, respectively.
For the week, both the Dow and S&P 500 gained 0.4%, and the Nasdaq rose 1.2%. Benchmarks ended in the green on upbeat earnings results from industry heavyweights. These include earnings reports from Wal-Mart Stores Inc. (WMT – Analyst Report), Cisco Systems, Inc. (CSCO – Analyst Report), Macy’s, Inc. (M) and DR Horton Inc. (DHI). Moreover merger and acquisition news including that between Hasbro Inc. (HAS) and DreamWorks Animation SKG Inc. (DWA), and Berkshire Hathaway Inc. (BRK.A) and The Procter & Gamble Company (PG) also boosted markets.
However, decline in oil prices eroded some of the week’s gains. Moreover, renewed tensions in Ukraine, soft data from Europe and China also dented investor confidence. Economic data released during the week had little impact on the benchmarks. Dismal initial claims number and discouraging budget deficit data also had negative impact on the benchmarks.
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Stock Market News for November 17, 2014 – Zacks Investment …
